The latest Bank of Scotland Business Barometer showed confidence across the country increased by five points to 39 per cent by mid-September, before the current fuel disruption and supply chain issues occurred.
Manufacturing reached a four-month high – up nine points to 49 per cent – while the services sector gained 11 points to 47 per cent, the highest since early 2017, with particularly strong trading prospects in hospitality and financial and business services.
Retail confidence improved by eight points to a four-month high of 42 per cent, while construction rose by one point to 41 per cent – a three-year high.
The survey, which covers the period from September 1 to 15, found that hiring intentions increased by 13 points this month, with a net balance of 33 per cent of firms planning to increase staff levels over the next 12 months – the highest reading of 2021.
Overall UK business confidence also rose by 10 points in September to 46 per cent and the number of businesses planning on hiring new staff more than doubled from 18 per cent to 37 per cent.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “While some protective measures remain in place, the easing of most lockdown restrictions has been a welcome boost for firms up and down the country.
“This has had a positive impact on several sectors as they return to normal trading.”
He said confidence remains “solid” despite challenges including the fuel disruption and supply and staff shortages.
“Firms remain resilient and we’ll be by their side to help them in the months and years ahead,” he added.
Confidence in trading prospects also rose by nine points to 43 per cent and firms’ optimism in the economy increased by the same amount to 48 per cent.
Paul Gordon, of Lloyds Bank Commercial Banking, said: “There are obvious challenges ahead in terms of labour availability, and the impact this has on the post-pandemic recovery.
“It also remains to be seen how the recent events in the fuel market might impact businesses’ outlook.
“However we can seek comfort in recent progress across the sectors and of the levels of confidence recorded in manufacturing, hospitality and financial and business services.”
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said the figures are “encouraging.”
He added: “Employment expectations have risen significantly, with more than half of businesses expecting to recruit in the next 12 months.
“The hope is that the availability of labour will increase to alleviate current staff shortages for many firms, which will help to underpin UK economic growth over the medium term.”
The Business Barometer questions 1,200 businesses monthly and provides an insight into UK economic trends regionally and nationwide.
This month’s survey was conducted before the UK’s fuel disruption and supply chain issues impacted business across the country.